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Stocks close lower on caution about economy

NEW YORK — The stock market paused from a four-day rally Monday and closed modestly lower after big consumer companies gave a cautious outlook for economic growth.

The market, which rallied the past four days on stronger economic signals, fluctuated after Lowe's Cos. and Campbell Soup Co. reported higher earnings but reminded investors that a recovery among consumers is expected to be slow. Stocks drew some support from news that oil field services company Schlumberger Ltd. agreed to buy Smith International Inc.

"Corporate America is being cautious with their earnings predictions," said Roy Williams, CEO at Prestige Wealth Management Group. A recovery in consumer spending hasn't happened as fast as executives have hoped, he said.

Trading was also fragmented as investors hunted for deals following last week's big rally. The Dow Jones industrial average posted its best weekly gain since November on strong earnings and economic reports.

"I wouldn't read too much into this," Sam Stovall, chief investment strategist at Standard & Poor's, said of Monday's trading. "There could be some minor profit-taking."

According to preliminary calculations, the Dow fell 18.97, or 0.2 percent, to 10,383.38. The Standard & Poor's 500 index fell 1.16, or 0.1 percent, to 1,108.01, while the Nasdaq composite index fell 1.84, or 0.1 percent, to 2,242.03.

Rising stocks were about even with losers on the New York Stock Exchange, where volume came to a light 944 million shares.

Lowe's said Monday its fourth-quarter profit rose 27 percent as it cut costs and saw a slight increase in sales. The home improvement retailer's results beat analyst projections and Lowe's said it anticipates sales to grow as the housing market recovers. However, its first-quarter earnings forecast was below expectations.

Campbell Soup's fiscal second-quarter profit met forecasts as lower costs helped offset a slowdown in U.S. sales.

"Right now, they're trying to heal," Steven Goldman, chief market strategist at Weeden & Co., said of consumers.

Consumers are holding off on making big purchases like home renovations because employment is still a concern, Goldman said. That hurts companies like Lowe's that rely on big spending from U.S. customers. But they're also being choosy when it comes to staples including food. Campbell's report reflected that caution.